TL/DR –
Joe Kight, head of healthcare with U.S. Bank, spoke about the challenges health systems face in managing revenue cycles, with COVID exacerbating issues around cash management and patient payment collection. Kight emphasizes the need for health systems to manage cash cycles and transition to digital environments, or risk being left behind as patients expect seamless payment experiences. He further explains that smaller, rural health systems face more challenges due to stretched resources, and that technological investments and upgrades can help health systems improve their revenue cycles and denial management.
Managing Payor Relationships and Optimizing Payables in Healthcare Systems
Given the lower margins and higher operating costs in healthcare, focus on payor relationships and efficient payables management is vital. Joe Kight, U.S. Bank’s healthcare head, offers insights into healthcare systems’ current status with revenue cycle management optimization.
Kight oversees three healthcare segments within U.S. Bank and the Institutional Client Group: a large-cap for-profit segment, a large-cap not-for-profit healthcare group, and a middle-market healthcare segment, both nonprofit and for-profit.
The Impact of COVID on Revenue Cycle Management
The COVID pandemic has highlighted some cash management issues within healthcare systems, including challenges in patient payment collection and denial management. To address the issue of complicated healthcare payments, U.S. Bank acquired Salucro, rebranded as MedEPay. MedEPay offers multiple payment options and consolidates all payment flows for the system.
The Need for Digital Integration and Automation
Healthcare systems are searching for ways to speed up denial management and collect payments faster amidst reimbursement uncertainties. The need for digital integration into EHR systems and a seamless payment experience for patients is driving this transformation. A failure to focus on these areas could leave healthcare systems lagging.
Internal Resources and Collaboration Challenges
The transition to a digital environment requires significant effort from internal IT, finance, and procurement departments. Banks now engage with cycle management departments and procurement teams in addition to CFOs, ensuring coordination of solutions and vendor relationships.
Staffing and Resource Disparities Between Large and Small Health Systems
Rural, smaller healthcare systems face more significant challenges, with higher utilization rates and increased labor costs. They need to balance patient payments, reimbursements from insurance companies, and overhead costs while moving to an outpatient model. On the other hand, larger systems with more resources and sophisticated internal setups can plan and implement changes more effectively.
The Role of Technology Upgrades and AI in Healthcare
Despite the high costs associated with technology upgrades, healthcare systems are recognizing the need for innovation. The implementation of AI and ensuring data privacy while offering easy-to-use payment portals is a priority. The ability to scale and integrate technology effectively is a characteristic of forward-thinking organizations.
The Role of Supply Chain Financing
Supply chain financing can help reduce DSOs (Data Sales Outstanding), a key measure of a company’s ability to collect money. U.S. Bank offers healthcare systems the opportunity to speed up their collections by financing their receivables based on the risk associated with them. Although the adoption of this method is not yet widespread, it is in the early stages within healthcare systems.
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